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Post by misotu on Jul 18, 2017 9:26:28 GMT
The money laundering thing is baffling to me. If Zopa were accepting cash it would be fair enough, but given that the funds are all transferred in electronically from another financial institution any laundering, if it's happening, is down the chain from Zopa and can't be caught by them.
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Post by misotu on Jul 1, 2017 10:41:40 GMT
OK, did some more thinking about the terms. The main issue for me is that the terms as they stand discriminate heavily against small lenders sensibly drip-feeding funds to get consistent diversification. Lenders already lending in chunks of £300 are going to have their ISA allowance done quite easily in the offer period, fee-free. At present lending speeds and £10 loans I'll struggle to get £5000 transferred over, and then only by running the risk of falling foul of the four-week deadline and being charged 1%.
The second issue is the arbitrary nature of making the offer conditional on lending speed. I understand that there has to be a cut-off point, but four weeks seems unnecessarily tight given that this is a new lending situation and a little unpredictable. Zopa's own worked example shows a lender receiving only a partial rebate of the 1% sales fee. I really don't think that this is acceptable or reasonable. The refund of fees could be done in several tranches, if necessary, to give lenders confidence that, provided the funds go into the ISA within the offer period and are not withdrawn, they will not be charged a fee.
Since the offer dates have still not been confirmed, I've written to Zopa to ask them to consider treating smaller lenders more equitably and being more flexible on both offer period and cut-off dates. Not holding myy breath or anything, but there is clearly still room for flexibility.
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Post by misotu on Jul 1, 2017 9:57:29 GMT
Just received my weekly update with the fee-free selling details and, as is usual with Zopa, there is a sting in the tail of their offer. My email contains a link to the terms and conditions here
The terms of the offer mean that the money has to be reinvested in your Zopa ISA and lent out to borrowers within four weeks of the offer end date. I realise that they don't want people using the ISA offer to extract funds from Zopa fee-free for another purpose, but this set-up is needlessly restrictive because it: a) Discriminates against those drip-feeding in order to maintain consistent diversification and b) makes the whole offer dependent on factors outside the lender's control - ie lending speed So people need to understand that if they take advantage of the offer they may still end up paying the 1% through no fault of their own. Have to say that I'm pretty disappointed by this. For drip-feeders, the offer will deliver little benefit and obviously it'll be pretty upsetting if lending speeds tank, especially since those recycled funds will not be prioritised over brand new money. I'll be lucky to get 15% of my holding transferred fee-free. Here's Zopa's worked example: For example, you might request to sell £5,000 from Zopa Classic on 25th July. After fees, you receive £4,925 net of the £50 loan sale fee & £25 deduction due to current loan market conditions (e.g. if the interest rate on loans you wish to sell is lower than the current market rates: read more). You invest £4,925 into ISA Core, and £4,900 is invested by 31st August 2017. You will receive a rebate of £49.49 (£4,900 * 1.01%).
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Post by misotu on Jul 1, 2017 9:19:15 GMT
I have the same situation with Mr Misotu - I asked Zopa to put the customer name at the top of the screen like banks and building socieries do in my feedback form.
I agree that it is odd that the "summary" section at the top of the page shows figures for total earnings, deposits and withdrawals but not the total invested.
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Post by misotu on Jul 1, 2017 9:12:56 GMT
You're right aboout the queue information - you used to be able to see exactly where you were in the queue years ago. I find the lack of information on the queue very frustrating at times
I'm not sure what information you are looking for on loan service charges? Lenders don't pay fees to Zopa, but they do take a fee based on the difference between borrower and lender rate IIRC. Currently looks to be 0.7% in Core, but confess it's not something I've paid attention to for a while.
With regard to the 24 hours to transfer funds in once a borrower has been found, really don't think that's practical given the Zopa model! Most people are not terribly well organised - and each loan can involve hundreds of investors. I suppose it might be possible with a direct debit but that would simply mean having the funds sitting around somewhere else not doing much, for me at least. I don't mind having funds in the queue for a few days and they do close the platform to new investors and/or new funds from time to time when lending is very slow or demand very high.
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Post by misotu on Jul 1, 2017 8:52:41 GMT
Am I right in assuming that by selling my Z+ loans, with or without the free offer, the reinvestment in the ISA will be new loans and the loan size will be determined by the size of the deposit, as it would be if it was just normal "new" money being transferred in. If that is the case then I wonder how practical it will be to sell existing Z+ loans in <£2000 chunks in order to keep loans down to £10. I would hope the free sellout will apply no matter how many times loans are sold during the offer period. Yes, I would like them to clarify that the free sellout will apply on multiple sales within the offer period, as I am drip-feeding too. From the wording, it sounds that way but I suppose I'm going to have to email for confirmation again. I'm expecting funds to move rapidly though as they'll obviously be RRing the sold loans to ISA lenders. I already have 5 RR Safeguard loans on my ISA Core loanbook.
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Post by misotu on Jul 1, 2017 8:38:24 GMT
As Amphoria says, it's still there. Here's what you should see when you select the loanbook tab at the top of the screen, link is fourth line down:
Safeguard loans
£xx.xx Diversified across x loans
Show details on loan performance
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Post by misotu on Jul 1, 2017 8:33:01 GMT
This appears to be disappearing capital, rather than negative interest! Oh Zopa. I was just starting to think that the bad old, seat-of-the-pants days were over. But clearly not Love the airy response. "Oh yeah, we keep losing client money down the back of the sofa. Don't worry, it's only loose change and we know exactly where the rest of your money is. We'll fix it at some point and pay you back. Honest. I won't promise to get back to you with an update on something as trivial as losing our customers' money, but I am here for you if you want to talk about something completely different. xxxx "
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Post by misotu on Jul 1, 2017 8:23:47 GMT
Yes, they are rapid returns - I have 5 now, all for amounts of less than £10. But these loans are still Safeguard loans according to my loanbook - the entry in the Safeguard column is "yes" and my loanbook summary tells me that 1.9% of my present ISA loanbook is covered by Safeguard. The difference between the borrower and lender rates is also much greater than the standard 0.7% for non-Safeguard. So I'm expecting a payout if they default!
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Post by misotu on Jun 29, 2017 22:39:19 GMT
I seem to have acquired two Safeguard loans in my ISA Core account - bit of a surprise! Not that it's a problem.
I must have missed the information about this, if there was any published. I suppose this is how Zopa will enable people to sell their Classic Safeguard loans fee-free to transfer funds into their ISA account?
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Post by misotu on Jun 29, 2017 12:58:18 GMT
OK, I'm still not getting what the problem is. If I'm understanding what is being described, then it's identical to what happens in my account.
The money *is* being moved into your ISA holding account, but is then being handled in accordance with your investment instructions. You don't want money to sit in your holding account unless you have reinvesting turned off, surely? If you tell Zopa that new money in your ISA holding account should go into ISA lending in Core or Plus, depending on your setting, then that's where it should put it. I wouldn't expect to have to transfer that money manually into my ISA lending queue unless I had reinvestment turned off.
I understand the distinction between payments into your ISA from your bank and moving money from your investment account to your ISA account but I don't understand why you expect those funds to be treated differently once they hit the ISA holding account?
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Post by misotu on Jun 29, 2017 10:45:34 GMT
Not to take away from your comment, but just to say that I'm using Zopa on my Pixel-C tablet in a chrome browser with absolutely no problems.
I'm not sure what you mean by TAB/Phone mode, have never come across this or been prompted for it, but just accessing via a normal browser works fine. The Pixel-C does have a generous screen size though.
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Post by misotu on Jun 29, 2017 10:39:50 GMT
I asked about the exact basis on which Zopa determines loan size on the board recently, but no-one posted back with the info so this clarification from Zopa might be helpful.
Am very keen to lend only in £10 chunks, esp since Mr M also has a Core ISA so there's a strong likelihood of he and I lending to the same borrower from time to time.
According to Zopa, the loan size doesn't depend on the total amount on offer, it's based on the amount in matching only:
Q: I'm now drip-feeding funds into the new ISA account and want to keep my loans down to £10. Completely understand that £1999 is the key figure, but I'm not sure whether that's the sum of new money + repayments + matching or whether it is just new money on offer? Or some other combination?
A: The exposure is calculated at the 'matching' phase, so as long as you don't go over £2k in there, you should keep things at £10.
Due to the varying time it takes within both the queue phase and matching phase, it's good to keep around £2k in there altogether. Even if you're topping up small amounts from your holding account, it keeps your money moving through the queue. I.e. if you have £1600 in matching, put £400 in asap to get that money moving. Chances are you'll never reach £2k actually in the matching phase because you're always creating some loans to keep it below.
I hope this helps but please let me know if you have any further questions. Kind regards Will McCain
As an aside, I think from this I am 100% certain that the calculation is product-specific, the loan size for each product being based on funds being matched in that product. It really wouldn't make sense, diversification-wise, to do it any other way and I'm sure the nice Mr McCain from Zopa would have mentioned so arcane a complication.
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Post by misotu on Jun 29, 2017 10:07:46 GMT
What you describe sounds like it is working correctly, unless I have misunderstood you.
You have reinvesting turned on for your ISA account, so when funds arrive in the ISA holding account they are then transferred automatically into the ISA product you've specied for new funds. Although the funds travel via the ISA holding account, they are usually allocated within seconds from my observation, so it might appear that they have gone directly into the ISA product but this is not the case.
Funds transferred from investing holding to ISA holding are treated as new money, even if they are investment repayments. Doesn't seem to be any way round this as Zopa have decided not to allow automatic reinvestment into an ISA product from an investment product, probably because of the £20,000 personal annual ISA limit. Disappointing, although I'm experiencing very good lending speed in Core at the moment, with new money moving into matching within 24 hours, so really not a big issue.
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Post by misotu on Jun 16, 2017 9:25:28 GMT
One point and one question from me:
Point: The impending withdrawal of the safeguard lessens protection for current investors. The fund has always been able to use receipts to the safeguard fund from loans initiated after protected loan was made to help safeguard the investment. This will no longer be the case. In effect investors will be subject to REALLY finding out if the fund has sufficient funds to cover the lifetime of a loan without the fund having a constant source of funds topping it up. I wasn't going to mention the word Ponzi...oh my mistake? This is especially true for the very last people lending money through Zopa Classic.
Question: If there is money left in the safeguard fund after all loans have been repaid, will this be distributed to lenders and not Zopa, as I thought the trust should be run for the benefit of lenders not Zopa? If Zopa are planning to pocket the money then they should also guarantee that if the funds are not sufficient they will fund the shortfall, otherwise its a one way bet for them. Heads we lose, tails they win.
For the record I have never really liked the idea of safeguards or provision funds as they are not efficient, can give a false sense of security and allow the companies which control them to use them for dubious means with very little oversight.
You clearly understand this better than I do, but I wonder what will be the impact of the inability to transfer existing loans into the IFISA, coupled with the fee-free July sale? I rather assumed that a lot of currently-Safeguarded loans would be sold in July and re-financed through non-Safeguarded Core and Plus products? In which case, depending on demand, surely that will improve the Safeguard coverage position? I completely agree with you about any funds remaining in the provision fund in December 2022, together with income beyond that point from loans in default. Zopa is entitled to fees for administration, but why they should collect a risk-free windfall is beyond me. A distribution to lenders and borrowers seems way more equitable to me. Or possibly setting remaining funds against post-Safeguard bad debt until they are exhausted.
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